Mutharika accuses Muluzi, UDF cronies for ‘stealing’ $19m hotel money

Malawi President Bingu wa Mutharika has accused former president Bakili Muluzi for squandering about US$19 million meant for the abandoned five-star Namiwawa Hotel Project, saying his administration is now tasked to repay the loan from South Africa.

According to Mutharika, the former ruling United Democratic Front (UDF) government “borrowed US $18 or US $19m from South Africa to build a five-star hotel.”

But the President said the UDF government officials “shared the money among themselves.”

Mutharika: They shared the money

“I must make it clear money for the five-star hotel was misappropriated by the UDF government and my government must pay back that money,” said Mutharika.

Mutharika made the claims when he officially inaugurated the multimillion Msonkho House (Tax House) owned by the Malawi Revenue Authority (MRA), in a property which was abandoned for the hotel project, in the country’s commercial capital, Blantyre.

The hotel project was owned by Malawi’s defunct parastatal responsible for undertaking development projects – the Malawi Development Corporation.

Development Bank of Southern Africa, PTA Bank, Legacy Hotel Operators, Central African Procurement Services and Standard Bank of Malawi were reported financiers of the project at the tune of K1.1 billion.

Legacy Hotel Operators, of South Africa, were going to become the operator of the top hotel on completion of the construction.

But the project, along the Independence Drive to hilltop Sanjika Palace, stalled with reports that funds were abused by officials.

Namiwawa Hotels Limited Board of Directors was chaired by Emmanuel Fabiano, who is now Vice Chancellor of the University of Malawi. MDC was headed by Eunice Kazembe now a ruling DPP member of parliament. Chairperson of the MDC board was Friday Jumbe, the current leader of UDF.

Mutharika government converted the project into offices for the tax collecting.

The government Instituted an investigation into the operations of hotel project following allegations that some top officials of the organization misused money meant for the construction of the hotel but the investigations stalled.

The President said whenever he was driving past the project with visiting dignitaries he had difficulties to explain why the building was looking like an eyesore when it was abandoned.

MRA occupied the entire three-storey Keza Building, which was built and owned (then) by Muluzi, for some years until the DPP government started squeezing the former president over various graft cases which resulted in the Anti Corruption Bureau (ACB) seizing the complex.

Ironically, when the taxi collecting body got into the complex, it changed into MRA House when Muluzi was still in power but upon taking office President Mutharika fought hard to ensure that the beautiful structure is rendered useless until he accomplished his mission.

Currently, the plush offices have been turned into classrooms for Marathana High School which provides Cambridge tuition and is owned by businessman Ernest Kaonga.

Muluzi stepped down in 2004 after serving as president for 10 years. He retired from active politics in 2009 due to ill-health.

But he faces long-running trial at the High Court to explain a total of $12m (£8m) which was in his account from Taiwan, Morocco and Libya

Several UDF officials including former Finance Minister Friday Jumbe, Humphrey Mvula, are currently answering several fraud and corruption allegations.